What does the future of the bank branch hold?

NCR video ATM ©NCR

Is the branch dead? On evidence of the RBR Branch Transformation event held in London, the answer is a resounding no. Banks from around Europe lined up to discuss how they are transforming their branch experience to meet the demands of the modern retail customer, and while the consensus is that branch networks are shrinking, the branch remains integral to customer acquisition and retention, as well as for generating product sales.

Moral tax evasion?

Jean-Claude Juncker

Is it right to minimise your tax bill legally? Should you ignore incentives inadvertently built into complicated tax systems and effectively volunteer more assets to the government, to spend according to its own political priorities?

BAI Retail Delivery 2014: the inside track

BAI Retail Delivery, Chicago. Source: wikipedia

Technology is only as good as the people and processes around it. The BAI Retail Delivery session, entitled 'Technology as an enabler for operational excellence' and centred around panellists sharing their experience on when and where to apply IT to benefit the bank's operations, quickly became focused on the necessity of the people and the processes being ready.

Is the US core banking sector finally saying yes to outsiders?

Statue of Liberty. Source: featherboa

The US core banking software sector has always been notoriously difficult to gain a foothold in for the non-domestic vendors. The local heavyweights – FIS, Jack Henry and Fiserv – have over the years acquired smaller players and have ended up with numerous systems under their corporate umbrellas. These companies have also been traditionally close to the regulators, making the case for a bank or credit union to select a non-US vendor difficult to justify.

What's the deal with Finacle?

Infosys swimming pool, Bangalore.

I ask the question just after news that its erstwhile head, Haragopal Mangipudi, left Infosys to be replaced by SAP veteran Michael Reh. This was the first senior change carried out by Infosys' new CEO, Vishal Sikka, who joined the company in August.

How to keep a corporate customer

If corporate banking customers are unhappy with the customer service their bank offers them, the chances of them leaving are higher today than ever before, was the stern warning by panellists at the recent summit organised by billing and pricing software supplier, Zafin. Steve Murphy, research director at CEB Tower Group, cited research that the 68 per cent of corporates will not hesitate to move to another bank if they feel their current provider is not offering them top service.

How to mitigate cyber risks

© www.wuky.org

One of the focal points at the SIA Expo conference in Milan was cybersecurity. Coen Voormeulen, chairman of CPMI (formerly CPSS), the cybersecurity working group at the Bank of International Settlements, kicked off the discussion by suggesting that 'cybersecurity threats are evolving' and that 'they can come from a variety of sources'.

SIA Expo 2014: the inside track

Panel discussion at SIA Expo 2014

The main theme of this year's SIA Expo conference in Milan was that we are moving towards a more digital world, enforced with the strapline: 'Don't worry, be digital'. Although the majority of Italian citizens believe their country lags behind the rest of Europe in digital payments, speakers were keen to explore how attitudes could be changed in the country. The event focused on payments, mobile technology and innovation in the financial services space and was organised by Italy-based service provider, SIA.

Branches and mobile banking: do you need both?

© www.visionaustralia.org

One of the discussions at the Payments Knowledge Forum, which took place in London last week, was whether or not both branches and mobile banking are needed? While there were plenty of good arguments for both sides of the debate, the main common point was consumer experience. Consumers want to have an enjoyable banking service that is easy to use and consistent, whatever the channel. Robert Johnston, marketing director at NCR, said that a key differentiator from one company to another is the quality of consumer experience, more so than the products that are on offer. 

Sibos: final thoughts

Boston. Sibos: final thoughts

The carnival is over and the industry is moving on. Here are our final thoughts on this year's Sibos event before it fades from the memory.

Sibos: day four round-up

Bill Gates @sibos

Sibos 2014 closed with a keynote speech from Bill Gates, who famously branded banks 'dinosaurs' 20 years ago. There were also concluding comments and reviews of the week from the various forums and streams.

Here are the highlights from day four.

Payments Knowledge Forum: the inside track

@TFL

This year's Payments Knowledge Forum (PKF) in London kicked off with the theme that we are moving towards an ever more virtual world. David Smith, Wincor Nixdorf, opened the event with the statement that people are constantly on the move and expect their services to move effortlessly with them.

So how can the payments industry live up to this expectation?

Sibos: day three round-up

Innotribe

Sibos entered its third day with the introduction of new forums, a focus on real-time payments and the conclusion of the annual Innotribe start-up challenge.

Sibos: day two round-up

@Swift

Day two of Sibos continued the theme of collaboration, with more focus on standards, market infrastructures and new technologies under the spotlight.

Sibos: day one round-up

@Swift

Sibos 2014 kicked off in Boston with the focus inevitably on regulation, standards and the build-up to the much anticipated plenary which revealed Swift's pricing strategy.

Interfering with interchange fees: Is the EU going too far?

European Parliament. Source: Björn Laczay

Are European Commission (EC) proposals to cap card interchange fees a threat to innovation and competition?

That’s the contention of a new paper by David S Evans, a lecturer in law at the University of Chicago and chairman of Global Economics Group, a legal advisory firm.

Why are P2P payments slow on the uptake in the US?

© www.zafin.com

After speaking with Chris Burfield from FIS about the vendor’s recent person-to-person (P2P) payments project at US-based Everbank, a question arose: why are these types of services slow on the uptake in the US?

Have European banks given up on core banking system replacements?

© www.itrw.net

Despite the emergence of new technology and increasing competition, it seems the replacement of core banking systems is not on the agenda for European banks. Instead, banks are investing in niche IT projects to not only maintain their existing systems, but to introduce incremental changes, which can provide a quick return on investment (ROI) and meet their business and consumer needs.

New challengers to the UK banking market

Welcome to the IBS table of the challengers to the UK banking market.  

We have put together a list of financial institutions looking for business in the UK.

More details on the core system decisions of the respective banks can be found on the IBS website.

We welcome any input to the table and will be making regular updates, so if you would like to add to the list please contact us via email or the comments section below.

SAP Financial Services Forum: The inside track

This week’s SAP Financial Services Forum in London was a reminder of the supplier’s strengths and weaknesses in this sector. It was also a reminder of just how far SAP has moved in the last few years from its Walldorf and ERP centricity. In part through some major acquisitions, of course, it is now far more diverse and international than it was, with this also a key reason for almost ten per cent of its revenues now coming from the financial services sector.

FIS's takeover of Clear2Pay: what’s the story?

Brussels, home of Clear2Pay

The pool of independent companies in the payments processing space has shrunk yet again, with Clear2Pay being taken over by US fintech giant, FIS. The official announcement, of course, praises the €375 million acquisition, with Clear2Pay stating that ‘the combination of these two companies will be uniquely qualified to deliver true payment systems convergence’. Which translates into plain English as FIS will have an even larger portfolio of payments systems and solutions, some complementary, some competing.

Can Apple make the mobile wallet work?

So far the mobile wallet has been the dog that failed to bark in the payments world. There is little progress despite the fact that the key technology, NFC, has been around for a while, and despite the success of Paypal, an online money transfer and payment platform, for many years now.

Sibos 2014: what to expect in Boston

With one month to go until thousands of delegates converge on Boston for the annual Sibos event, we give you the run-down on what trends and topics to expect during the conference. 

Bank of Cyprus and Laiki Bank: a match made in haste

I was delighted to talk recently to Philippos Leandrou, manager of IT services at Bank of Cyprus, about the project which finished earlier this year to merge Bank of Cyprus and Laiki Bank.

This merger was dictated by the EU as part of a bail-out which ‘crushed’ Cyprus. Except in the case where the EU willed it, the merger would surely have been disallowed otherwise, since it leaves Cyprus with effectively one bank. The terms of the bail-out saw all deposits over €100,000 in Laiki Bank and Bank of Cyprus used by the government to contribute to the bail-out.

Are banks slow in taking on the cloud?

© Neuro, Commons Wikimedia

Of late, there has been a lot of hype around why banks remain sluggish in adopting the cloud. As we all know, the banking services industry as a whole is often accused of being slow to implement innovative technology, with around 75 per cent of banks in Europe, for instance, using outdated core banking systems.

In part, concerns over security have created a barrier to the deployment of cloud technologies. These include the lack of visibility into the service provider security measures, the potential for unauthorised third party access to data, plus the lack of control over where data is stored.

Are real-time payments in the US a realistic prospect?

There has been a lot of coverage of real-time payments projects around the globe in the IBS Journal over the last few months, and it was certainly one of the key themes of the EBA Day conference in Helsinki in June. Europe looks like it is getting its act together in this respect, especially with SEPA now in the rear-view mirror and ISO 20022 gaining prominence, whilst the likes of the UK and Sweden have been ahead of the curve.

All that matters is not getting fined

Spending all your time firefighting

A common question we at IBS ask is, why do banks continually plump for older core systems?

Why do so many other banks focus on the time-honoured activities of patching up their existing software rather than tearing it all out and starting afresh?

There are a number of reasons for this, and they are well enough rehearsed.

Old systems, older systems, even older systems

Zions HQ, Salt Lake City © Ricardo630

I’ve been immersed in the US core banking systems market for the last few weeks as we are working on a new report, to help banks to navigate the many offerings that are available here. The task has taken me around the three mainstream heavyweights (FIS, Fiserv, Jack Henry & Associates), the few mid-tier players that remain (CSI, D+H, IBT), and the smaller players, including the couple of would-be new entrants. A key consideration, of course, is the extent to which these might finally be challenged by the non-US core system vendors.

KYC: too many cooks?

At the best of times banks are reluctant to share ideas and information with each other, but it is clear that in some cases there is no discernable advantage to differentiate. KYC, for instance, is one of them, as I discussed during this piece in the IBS Journal in May. Today’s news that Swift has added six major banks to its KYC service, launched earlier this year, raises the question once again: Why does the industry have so many KYC utilities?

Free in-credit banking under threat in the UK

Don't end free in-credit banking

At least in terms of perception, the UK banking sector is in flux. There are new banks, new regulators, new suppliers, new business models and new scandals. Now, we can add a new ‘joined up’ and ‘in depth’ investigation by the Competition and Markets Authority (CMA) into personal current accounts and small business banking, again including current accounts and small business loans.

Why do banks have so many staff?

Rabobank HQ interior

I had my first visit to Rabobank’s new headquarters in Utrecht last week (locally dubbed the ‘binoculars’, due to the exterior look, while inside it is undeniably Dutch-style funky - http://www.sander.nl/en/sander-architecten-international/clients/companies/rabobank-nederland.aspx).


However, my meeting was in one of the bank’s other offices in the city, accessed by a Rabobank people-carrier, shuttling between the two complexes. Which gave me time to ponder, why do banks have so many staff? The new HQ certainly looks large but it is insufficient to house all of the bank’s staff in Utrecht. In total, Rabobank has 61,000 full-time employees. What do they all do?

Misys' EMEA market forum: the inside track

Jordi Cruz, Masterchef Spain's presenter,
and gin and tonic bubbles with mango sorbet

Last week’s Misys EMEA Market Forum in Barcelona was relatively upbeat, with more than 500 bankers, technologists and analysts in attendance. CEO Nadeem Syed kicked off his opening plenary outlining Misys’ vision and introducing yet another rebranding of its offerings into a ‘Fusion Family’ – Fusionbanking, Fusioninvest, Fusioncapital and
Fusionrisk.

Bitcoin: If it keeps moving, regulate it

Bitcoin: If it keeps moving, regulate it

IBS recently noted the reluctance of existing banks, suppliers and regulators to engage with bitcoin and other virtual currencies (VC), but at least it hasn’t suffered the same fate of the Liberty Dollar in the US, which was stamped on by the FBI in 2007. Its computers were seized, its currency, backed by $7 million in gold and silver, was confiscated and its founder was eventually found guilty of ‘making, possessing and selling his own currency’. 

Open source technology: is it a legitimate model for software vendors?

Increasingly, open source technology is popping up on the IBS radar, with the latest addition to our Risk Management Systems & Suppliers guide, Open Gamma, being a proponent of the open source model. Other notable examples of vendors which have taken this route include Romanian supplier Allevo, which earlier this year launched its open source community, FINkers United, to the public, with access to the code of its qPayintegrator payments platform.

Atom Bank: second mover advantage

It’s easy to be critical of the branch-first strategy of Metro Bank in the digital age, but listening to Anthony Thomson at the launch of Fiserv’s new Agiliti system gives one a more sympathetic perspective. The cumbersome regulatory process cost the bank millions; the payments system was jealously guarded by the existing high street banks; and the capital requirement was huge, even at a time when the industry was gasping for collateral.

Heightened competition? Be careful what you wish for...

Heightened competition in any sector is typically seen as desirable, giving greater choice to consumers and encouraging better pricing and service levels, but it is seldom this simple. For one thing, it can be a case of, 'be careful what you wish for'. In financial services, payday loan companies have brought more choice, for instance, but not in a good way. And if the additional choice is just more entities providing the same types of service with the same business models as the incumbents, does this really help?

Signs of life in the UK core banking market.....at last

Is the UK core banking software market finally showing signs of life? Vendors large and small are flocking back to the once dormant space as around 25 entities are waiting for approval from the country's regulator, Financial Conduct Authority (FCA), to launch banking operations.

Swift, a political lever?

One man's KYC regime is another man's foreign policy. Indeed, it seems to be the US's main weapon at present: the sanctions against Russian individuals and companies which were expanded by the EU and US in the last week of April have echoes of an earlier controversy about whether Iranian banks should have been expelled by Swift in 2012.